If a Company Decreases the Variable Expense Per Unit While

question 91

Multiple Choice

If a company decreases the variable expense per unit while increasing the total fixed expenses, the total expense line relative to its previous position will:

• A)shift downward and have a steeper slope.
• B)shift downward and have a flatter slope.
• C)shift upward and have a flatter slope.
• D)shift upward and have a steeper slope.

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Definitions:

Capital Goods

Items used in the production of other goods or services, such as machinery and equipment.

Production Possibility Frontier

A graph showing all the highest production outcomes for two or more products based on a certain amount of inputs (like resources and labor), illustrating the compromises in the production levels among various goods.

Resources Improvements

Enhancements or upgrades to the inputs used in the production process, including technology, labor skills, and machinery, leading to increased efficiency or productivity.

Technology Increase

Refers to advancements or improvements in technology that enhance productivity or efficiency.